Gold investing

evosy1978

ok thanks for that,

your right it would be less than £1000, bout £500 more like.

Ive been on the bullionvault website for the last hour. I was looking at the audit list of what quantities people own of gold. Would i not be able to have this much invested in the BV rather than physical??

ta

TRUSt_NO_1_2

evosy1978 wrote: »

ok thanks for that,

Would i not be able to have this much invested in the BV rather than physical??

ta

Yes to BV.
I could not remember the costs as I haven't used it for about a year.I'd forgotten how low their costs are.The spreads (difference between spot price and what you can buy for) are as low as you will get.
Goldmoney.com spread is about 5% when you purchase.
BV depends on what people are offerering to buy and sell at.You can put a bid in and wait for someone to sell (or buy).

evosy1978

Ok, im with you so far. Ive still got some more research to do.

Mayby I should explain my situation. Ive only recently been reading this savings forum with reference to investments and shares. Im totally new to the whole stocks and shares scenario and everything ive read so-far has gone over my head.. Ive come across the gold threads and ive been reading threads on the motley fool forum in light of all the hype over the last few days regarding the price per ounce.

Basically the reason i want to invest in some gold is with a view to making more money than a normal savings account would over a year or 2 or 3.. (isa account will be full on april 6th) I know their is a big risk that things can go t1ts up but - if i was to buy an ounce for about £500 how much would it need to increase in a year to give a better return than an average paying savings account 5%!?

PLease let me know if im barking up the wrong tree.

ta

TRUSt_NO_1_2

evosy1978 wrote: »

if i was to buy an ounce for about £500 how much would it need to increase in a year to give a better return than an average paying savings account 5%!?

PLease let me know if im barking up the wrong tree.

ta

Commission is .8% to buy ,then .8% to sell.
Assume a 0.5% spread between buying and selling price.

The storage fee (custody charge) is only 0.12% per annum but unfortunately has a minimum of £2 ($4) per month,which on £500 is 4.8% per annum,so that is a BIG hit.

Bear in mind if you had upto £20,000 of gold,the storage fee would still be £24/annum,so the more you buy the lower your storage costs as a % of your gold's value.


A 5% savings account would result in £525 after 1 year.
Your total BV costs,including buying and selling once, would be approx £34 on a £500 gold purchase,so you would need the gold to be worth more than £525+34 =£559 to beat 5% savings,which is an 11.9% increase.

There are people talking of gold going to big numbers in the near future...next couple of years.

jamesd

evosy1978, you've just described yourself as someone who should not be making large investments in commodities. If that 500 is more than 10% of your investments, you should really back off to avoid the chance of being burnt if there's a big price collapse.

The price would need to rise by 5% or so - from 500 to 550 - to beat bank accounts. It's likely to go up and down by more than that each month between now and this time next year.

Something nicely stable like BlackRock UK Absolute Alpha is where bigger chunks of your money should be.

aztec21

TRUSt_NO_1 wrote: »

Commission is .8% to buy ,then .8% to sell.
Assume a 0.5% spread between buying and selling price.

The storage fee (custody charge) is only 0.12% per annum but unfortunately has a minimum of £2 ($4) per month,which on £500 is 4.8% per annum,so that is a BIG hit.

Bear in mind if you had upto £20,000 of gold,the storage fee would still be £24/annum,so the more you buy the lower your storage costs as a % of your gold's value.


A 5% savings account would result in £525 after 1 year.
Your total BV costs,including buying and selling once, would be approx £34 on a £500 gold purchase,so you would need the gold to be worth more than £525+34 =£559 to beat 5% savings,which is an 11.9% increase.

There are people talking of gold going to big numbers in the near future...next couple of years.

If your only buying an ounce surely you would be better off buying the real thing to save on commission, storage etc. Why don't you just buy a one ounce coin?

stargold

I absolutely agree. Hold the physical metal. It eliminates the ounterparty risk. Unfortunately as supply of coins is so tight, most bullion dealers are cleaned out. recently I have been using http://www.bullionsupermarket.com to search for the best value items on ebay.